Business on the high street is tough for travel agencies at the moment.
But winners of the Travel Weekly and MacIntyre Hudson £5,000 makeover competition Yvonne and Peter Holmes of Classic Travel in Loughton, Essex, are determined a makeover can give them the boost they need.
The couple met Andrew Burnham, principal of accountancy firm MacIntyre Hudson, last month to analyse the business and come up with a strategy for Classic Travel…
Andrew took Yvonne and Peter through an analysis of their business, from their management accounts, business performance over the past five years, to how they are currently trading.
He asked them a range of questions about the future of the business, which will shape the makeover:
- Do they want to stay working in the business?
- If not, do they have an exit strategy?
- Have they got a nest egg for their retirement?
- Are they looking at management succession within the Classic business?
- Or are they thinking of different ways to build up the business and retire?
“It’s helpful to get a feel for the people and the business,” said Andrew. “It is important to understand what their ambitions are from now on. They need a clear vision of the next five- to 10-year strategy of the business.
“This initial meeting between the parties is often referred to as a ‘scoping’ meeting, as it defines what the project will encompass in order to direct the effort in the right areas.
“At this stage, it is helpful to tap into the aspirations of the business owners and start them thinking about their long-term objectives. This will stimulate the process of business change.”
Yvonne and Peter have been in their current shop for 25 years. During that time they have had up to four retail shops, but are now trading from one high-street outlet in Loughton, and also run their own tour operation renting villas in Florida. Yvonne operates front of shop, while Peter has a more back-of-house role running the agency. They are generally on site six days a week.
The couple have been innovative in their approach over the years, getting involved early in the online boom. They claim they were the first to start a website selling Disneyland Resort Paris, but a year or two later competition increased, and they lost their advantage. They also specialised in Lapland, but, again, competition made it difficult for them to maintain their market advantage.
Peter said: “We have been looking for a niche and we have had some success along the way. The trouble we have found is trying to reinvent ourselves, as the industry changes so quickly.”
The current market for the shop is tough, and the couple have decided they want to make sure there is capital value for their own retirement plans in the next 10 years.
Yvonne added: “It’s been tough. We are now competing not just with other agencies on the high street, but with online, too.”
Burnham suggested a range of ways they could consider taking the business, such as a family succession, or a management buyout through incentivising someone within the business.
This is a time when the agents should be considering a review of their financial protection arrangements, as Burnham said many are over-covered. He also said it was a time for Peter and Yvonne to consider reviewing their consortia membership to ensure they are getting the best deal.
Burnham advised the agents to ensure their technology allows them to run reports on types of sales, most popular destinations and the productivity of employees.
It is imperative to have this information to look at the margins and profitable areas of the business, he said.
Burnham added: “It is about driving the mix of your business to the higher-margin sales. It’s not about working harder; it’s about working smarter.”
Peter said: “We like a challenge. If we can come up with a plan, we’ll give it a go.”
More
- travelweekly.co.uk/travelhub: chat to Andrew Burnham about improving your business.
- travelweekly.co.uk/makeover: more on Classic Travel’s business tune-up